Wednesday, November 23, 2016

A yellow hair fox in the chicken coop


America has done the unthinkable, electing a man who may run the White House like a casino. Hillary Clinton was the common sense candidate, but democracy is not a logical game. Shell shocked, the media carried out an exhaustive soul searching to explain the cause of this unexpected and against nature election and figure out why their projections were so wrong. Let bygones be bygones. At 70, Donald Trump will become the 45th and oldest president of the United States[1]. He is also the strangest and most oddball of the lot, even by US presidents’ standards.

Trump was elected because a sizeable segment of the American people, mostly living in the flyover states is fed up with the Washington establishment, which is regarded as out of touch, uncaring, and doing nothing for them. In other words, being a political novice was Trump’s comparative advantage. Ironically, to compensate for his lack of political savoir-faire, Trump is now busy recruiting a team of Washington insiders.

If Trump is not the first oddball to move into the White House, he is first real estate tycoon and billionaire to do so. As a brash, ostentatious and tasteless billionaire, one wonders whether he and his extended family will enjoy the quaint coziness of their new abode.

At this stage, only a fortune teller with a crystal ball can tell what the future holds for America and the world. For clues, one can look at some former unconventional American presidents and consider experiences from other countries which were once run by billionaires.

The Trump election brings to mind the case of John Tyler, the 10th American president better known as His Accidency. Unaligned with any political party, his moving into the White House was an accident of sort due to the death of the incumbent, William Harrison after only one month. Lawmakers wanted a new election. Historians consider him in low esteem and his legacy insignificant. He is mainly remembered for escaping an impeachment and having a veto overridden; the first overridden veto of any American president. His claims to fame are his 15 children and the annexation of Texas in 1845. Ironically, His Accidency is responsible for the first Latino migration into America.

Warren Harding is also seen as one of the worse US presidents. Before entering politics at his wife’s urging, the 29th US president was a wealthy newspaper publisher. The Republican candidate won the election in a landslide promising to roll back the progressive legislations of his predecessor; he favored pro-business policies and a limit to immigration. He launched a tax cut program which benefitted the richest segment of the population, and imposed protective tariffs on imports. His presidency was tainted by corruption in his cabinet and by his extramarital affairs. He was a consummate poker player and in one night lost the White House china set. His presidency (1921-23) was cut short by a fatal heart attack.

Chile, Italy and Ukraine have experience in billionaire leaders.

Chile elected Sebastián Piñera (net worth US$ 2.5bn, 2016) in 2010 for a four year term. Piñera comes from a patrician family and Huayna Capac, the last Inca emperor, is one of his ancestors. The soccer club, airline and television tycoon made his fortune in the credit card business. Before taking office he sold his stocks and placed the rest of his business in a blind trust. His term started inauspiciously with a 6.9 earthquake shaking his inauguration ceremony. In 2012, the Economist, the British weekly labeled him an “inept president.” He was famous for his lapses and gaffes. In the United States, he is remembered as the guy who sat down at Barack Obama’s desk in the Oval Office. Apparently the first person to do so. Actually, Piñera could offer Trump his unique expertise in mine rescue. Trump wants to revive the West Virginia run-down coal industry and coal mining is notoriously accident-prone. Piñera is the man who stood on the spotlight while 33 miners were pulled alive to the surface after spending 70 days trapped underground in October 2010.

In 2014, Ukraine elected Petro Poroshenko, the Chocolate King (net worth US$ 1.3bn, 2014) as its president. Pro-western Poroshenko promised to resist further Russian aggression after Putin snatched Crimea and supported the separatist rebels in eastern Ukraine. Putin closed Roshen confectionery factory in Russia and seized its assets. Trump’s bromance with Putin doesn’t augur well for the Ukrainian leader who will certainly be persona non grata in Washington. To aggravate his case, Poroshenco visited Hillary during the campaign. To break the ice, Poroshenco phoned Trump and invited him to visit Ukraine, a greenfield country for luxury hotels.

The third billionaire is Silvio Berlusconi (80 and asset valued at US$ 5.9bn, Forbes, 2016), the on and off Italian prime minister during the period 1994-2011. After Trump’s surprise election, the disgraced former prime minister claimed that they are both cut from the same cloth. There is some truth is this statement as both are consummate salesmen, narcissists with oversized egos, bullies, gaffe prone misogynists and have tacky tastes in everything from women to buildings. Finally, both used their wealth to force the doors of politics without having any formed ideology. The media plaid a critical role in both men’s ascent to power. Berlusconi depended on the support of his media conglomerate, while Trump’s victory stems from the relentless and counter-productive bashing from the media establishment. Under Berlusconi’s leadership Italy became a reality television show. Forza Italia, Berlusconi’s anti Establishment party was more a vehicle for political permanence than political ideology. At the end, Berlusconi lost popular support because he could not deliver on his job creation promises, and Italians got tired of his scandalous lifestyle (remember the infamous bunga parties) and the corruption surrounding his business. There was no fire wall between public goods and Berlusconi’s business interest.

A Berlusconi clone has become the president of a respected democracy relishing its own Brexit moment.

Trump may have outfoxed Hillary, but the chicken usually come home to roost.

P.S. These fellows do not deserve any additional promotion, no pictures.

[1] Actually there are only 44 presidents, as Grover Cleveland was twice elected for nonconsecutive terms.

Sunday, November 6, 2016

Tropical Marie Antoinette

In the confined and shameless world of Brazilian politico-corporate corruption, it is more Versailles than Greenwich, Connecticut! With more trips to Rue Montaigne than to Wall Street, the loot is spent ostentatiously rather than invested with discretion. Last week a Brazilian newspaper ran an article entitled Fashion Week in Curitiba. Curitiba is the small capital of the small state of Paraná in southern Brazil. Since March 2014, the city’s claim to fame is not fashion, but Lava-jato, the Car Wash police investigation of the billion dollar corruption probe at state oil company Petrobras. It is the biggest graft and money laundering investigation ever held in Brazil. Curitiba is the seat of the investigation, and the city jails have become a social hub for jailed construction tycoons, crooked politicians and their respective lawyers and families.
Claudia Cruz, the 48 year old wife of Eduardo Cunha[1] the former speaker of the lower house, visited her jailed husband dressed in Chanel. What else could she wear? There is only couture in her closets. Cunha is an Evangelical Christian and a leader among his peers. He is also the most reviled and wicked Brazilian politician, the poster boy of greed and hypocrisy. The family’s life style is more Kardashian than evangelical austerity. Cunha is accused of pocketing millions of dollars in bribes from contractors involved in Petrobras operations and squirreling his loot in offshore bank accounts. The police believes that he has between US$ 13 and 20 million hidden away in several foreign bank accounts. The Swiss government has already identified US$ 5 million.
Between 2008 and 2014, Claudia Cruz is suspected of having spent over US$ 1 million in clothing, hotels and restaurants in Paris, New York City and Miami. She spent US$ 60,000 on tennis lessons in Miami. A day in Paris does not come cheap either: US$ 10.000 is an average. These figures came to light after the police tallied her credit cards charges. Her splurging in couture fashion did not pay off, as she never made it to the best dressed list. Because many bank accounts are under her name, she may soon have to leave her couture in her closet and switch to a prison uniform.
                                                         Seen on the Curitiba catwalk
The Marie Antoinette’s lifestyle of the Cunhas is not uncommon among Brazilian political families. The former governor of the State of Rio de Janeiro, Sergio Cabral, who coincidentally is from the same party as Cunha, also made headlines with his extravagant lifestyle. If his spending pattern was similar, his paying methods were different. He did not charge on his own credit cards but that of his corporate friend Fernando Cavendish. Alternatively, he charged the state. In 2014, Cabral resigned as governor to run for the Senate, but dropped his bid when it was disclosed, among other failings, that he had used a state helicopter to commute to his beach house, carry his kids and nanny to school and dogs to the vet.

                                                           Happy Times in 2012. 
Governor Cabral (left), Elke Batista (the guy who lost US$ 35 billion in less than 365 days) and president Dilma Rousseff (impeached) 
Now, the anti-corruption judges are catching up with him. Cavendish, his former friend is in jail, and has agreed to a plea bargain. Cabral and his wife, Adriana Ancelmo loved luxury junkets to Paris and Monaco, all expenses paid for by Cavendish’s construction firm. The firm, which is appropriately named DELTA became the governor’s private travel agency. In return, Cavendish received juicy state contracts at inflated costs. During the “friendship”, the Cabrals indulged in luxury hotels, such as Hotel de Paris in Monaco (standard room rate €500.00), restaurants like the Louis XV (three Michelin stars) and gifts. One particular gift attracted the investigators’ attention: In 2009, Cavendish gave Adriana Ancelmo a Van Cleef & Arpels diamond ring as a birthday present. The price tag was €220,000.00! When Cavendish was investigated, the friendship ended and the gift was returned. Cabral claims that he never knew the value of the ring.
Fortunately, for Cunha and Cabral there is no guillotine in Brazil.

[1] Rio de Janeiro is his political base. He has been given many derogatory nicknames; my favorite is Xicun Cunha, pronounced like chikungunya.